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09.25.09 Your Business Could Be Losing Nearly 50% Of Potential Income 
By Andrew Wee
If you haven't already read Chris Anderson's seminal book "The Long Tail", you could be leaving a lot of business and income potential on the table, especially if you're an affiliate marketer.  The premise in the long tail is that Pareto's 80:20 rule has been skewed due to the variety of choice in the marketplace. In an interview with the CEO of "digital jukebox" service provider Ecast, it's mentioned that of the top 10,000 albums available, the number of tracks that sold at least one track a quarter amounted to 98%. Additionally brick-and-mortar retailers like your Targets and Wal-Marts probably stock an average of 20,000 and 50,000 of the top CDs, DVDs and other merchandise, which comprises the bulk of their transactions. This is known as the "head" of the tapering tail graph.
In contrast, the "long tail" or selections outside the bestsellers (the orange sector in the graph above) can still account for 50% of your total revenue. Does this have any implication on internet marketing and affiliate marketing? If you've ever created content optimized for 4 or 5 keyword phrase for an SEO or bid on such a phrase for a PPC campaign, you've harvested long tail traffic. The "high competition" keyword phrases like "payday loan" and "webhosting" are in the "head", and unless you have some capital to fight the merchant or the top affiliates head-on, it can be a losing proposition. Long Tail's author Chris lists 9 recommendations for leveraging on the long tail which can give you an advantage in growing your business: #1: More inventory in, or way out One of the constraints in affiliate marketing is that when you're dealing in physical products, it's because of the fixed costs associated with manufacturing, stocking, shipping this merchandise, which leads to the single digit commissions you'd typically see. With "virtual inventory" fast becoming a trend that's here to stay - think Kindle ebook, software downloads - the potential for fatter margins can be a good way to grow your bottomline. The ultimate margin grower in areas such as lead generation/CPA marketing, where you're selling a name/email address to a merchant might be the ultimate "virtual inventory". Continue reading this article.
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